Readers requested I follow up on a point raised in Part 12 of the Series, The Second American Revolution.

For new readers: a triple-edged sword is hanging over America: the middle class is becoming smaller, the poor poorer, the rich richer. Economic data suggest the trend is long-term and cyclical, and that it characterizes not only America but Western societies in general.

Is there a solution?

Part 12 addressed 7 remedies, some more powerful and durable than others. Here is number 6:

“The coming absolute scarcities of absolute necessities will be the greatest change of context in world history. Could that change generate values that give birth to

(i) a new economic service?

President Rafael Correa of Ecuador mentioned the possibility of a new service created by … doing nothing, i.e., leaving the earth alone. He wrote:

“The nations of the Amazon basin are the lungs of the world, without which life on earth would be extinguished...Because fresh air is a good with free access, those nations do not receive just compensation for the service they generate. The idea of compensating for avoiding deforestation is only part of a larger concept, which is to compensate for the net contamination avoided. If the incentives of the Kyoto agreement are expanded to include the net contamination avoided, a revolutionary change in international exchanges could take place, permitting many nations -- above all, the developing ones -- to become exporters of environmental services.”[i]

(ii) A new economic sector?[ii] This option probably exists but is marginalized in modern capitalist economies…

More spectacular than (i) or (ii), could emerging absolute scarcities of absolute necessities create

(iii) a new source of creation of wealth?

Adam Smith identified land, labor, and capital as “the three original sources of all revenue as well as of all exchangeable value. All other revenue is ultimately derived from some one or other of these.”[iii]

Obviously, a fourth source of economic value could have a momentous impact on the decline of the middle class, hence on the three-edged sword menacing the Western world.

I suspect that, as with a new economic sector, the fourth source of economic value already exists, hidden in plain sight. We overlook it; our ideological blinders are on. As is always the case, they are produced, maintained and distributed by the system in place.”

The idea that a new service, a fourth economic sector or a fourth source of the creation of economic value exist/s in front of us, is based on fact, not fantasy.

Among notable historical precedents is the service sector, which today employs over 80% of the American population versus only 60% in 1960. The service sector as we know it originated in the nascent cities of feudal Europe. In the agricultural economies of the epoch, that sector was minuscule indeed. Its explosive growth, which nobody foresaw, saved the middle class. Doctors and lawyers took up where small farmers and factories left off.

The question, then, is not if but where a new service, a fourth economic sector and/or fourth economic source exists.

One candidate has already been mentioned.

The 982,000 hectare Yasuni National Park is an Ecuadorian reserve located in the Amazon basin. It has perhaps the greatest biodiversity on the planet; one hectare has more tree species than are native to all of North America.

The Yasuni also has oil. Proven reserves are 846 million barrels. Approximate value: $7.2 billion. Ecuador is proposing to leave the oil indefinitely in the ground. It is seeking $3.6 billion in contributions, or one half of the oil’s market value. The money will be spent on environmental measures such as reforestation and preventing deforestation and on renewable energy development, e.g. solar and geothermal. Nonextraction, by the way, will directly save 402 billion metric tons of CO2 and another 800 metric tons indirectly, in avoided deforestation.

“In this way,” the Ecuadorian government says, “Ecuador aims to leave an extractive economy behind and advance toward an alternative, equitable and sustainable development process supported by a sustainable energy matrix.”

Are we indeed looking at what the government calls “a new model of development?” A first step toward a new political economy?

Converting nonextraction of a natural resource into exchangeable value does not fit readily into any of the three traditional economic sectors: extraction, production, and services. Of course, what make the new model possible are new values emerging with the unprecedented epoch just over the horizon, i.e., a world of absolute scarcities of absolute necessities, notably of clean air produced by the Amazon. Those new values are taking concrete, economic form in financial contributions.

Ecuador’s President Rafael Correa is The Yasuni Initiative’s foremost promoter. A doctor of economics, his book, Ecuador: de Banana Republic a la No Repúblic, Random House, 2011 is a clear, thought-provoking work. I read it twice. ( It reminded me of the works of economist Andre Gunder Frank.) There are indications that for political reasons, a campaign is underway to marginalize President Correa’s book. As of the moment, no English translation exists.

Ecuador: de Banana Republic a la No Repúblicdoes not discuss directly the potential of a new service/sector/source; however, it knocks on the door.

I wrote the following open letter to President Correa. No translation is offered because the body of the text was presented in Part 12 of The Second American Revolution series. I will repeat here, though, what the letter stresses: a new epoch is emerging, highlighted by economic goods which are, given their combination of characteristics, qualitatively unique: they are (i) absolute necessities to human life, notably clean air and water; (ii) they have free access (clean air cannot be restricted to an area); and (iii) they are about to become scarce on a planetary scale.

In the quote cited above on the Amazon basin nations, President Correa refers to environmental services. My question to him:

Given the emerging scarcity of absolute necessities with free access, is it possible that the “environmental services” you mention are not only new services but perhaps a fourth economic sector, if not a fourth source of economic wealth?

I want to remind readers that presidents have more pressing priorities than philosophizing about a new political economy. Consequently, no direct response from President Correa should be anticipated. All responsible responses from other readers, however, will be posted here.

Phil. P., Lillian B.: No, I have not tried to publish The Second American Revolution series as a book.

Ernestine E., Salvador J. As I noted in the preface to the series, under present conditions, which include prevailing values, The Second American Revolution cannot occur. Indeed, do not expect a single one of the 12 parts to be realized. And even if 1 or 2 (for example, the abolition of the Electoral College) are adopted, it would make no difference – certainly not enough to constitute a second revolution. A part here and a part there do not make a whole. Syndrome, a Greek word, means different elements running together. It is the interactions among those elements which matter.

James S, Bill E., Harry M. (Regarding Parts 7 and 8 on reapportionment): No, to my knowledge no lawsuit to date has complained that the extreme variations in votes cast across state House districts are unconstitutional because they comprise a dilution of vote weight in the higher turnout districts. So far, all lawsuits have complained about extreme variations in population numbers across districts. In a word, the One Person half of the One Person, One Vote principle has been tested, the One Vote half, no.

However, a lawsuit waiting to happen is lurking around the corner. When it takes 500 votes to elect a representative in one district and 5,000 in the district next door, common sense tells you that something is wrong. Obviously and undeniably, the weight of a vote cast in the latter district is significantly less than a vote cast in the former. When the other shoe drops – and it will – it will land with a national thud that will cost cash-starved states, cities, and counties millions, if not billions, of dollars. I would prefer to see that money used for schools, roads, hospitals, etc. That money, by the way, is yours. So, too, is the reapportionment formula presented in Part 8. Such is my case.

Eddie L. No, I have not changed. I do not expect to see the reapportionment formula to be seriously considered, much less adopted. Given zero expectations, you ask a key question: “Why bother?”

As I wrote in The Source of Terrorism: Middle Class Rebellion, a useful definition of corruption continues to elude us. “I offer the following observation: competition improves the performance of a healthy competitor, whereas competition worsens the performance of a corrupt one.” (p. 367). In the case of reapportionment, the competition is not between persons; it is between persons and realities. Those realities are: extreme deviations in turnouts across districts prove that the weight of votes cast varies to an unconstitutional degree. The solution is known -- the formula presents it (Part 8). However, because the American polity has been corrupted -- i.e., changed to an oligarchy -- that solution cannot be implemented. Simply put, corruption is why the realities just presented are worsening the nation’s performance rather than improving it. My position throughout The Second American Revolution Series was not to deny that corruption but, to the contrary, to bring it to light, to make it conscious -- in order that it can be addressed, corrected. In a word, then, the lack of serious consideration -- much less acceptance -- of the formula is one more indication among many that America is a corrupt state.

Jack D, Charlie C. Yes, I believe it is worthwhile to demonstrate to future generations that many people DID know what went wrong and why; moreover, they also knew what to do about it. That those people did not implement the needed changes, e.g., the reapportionment formula, does not show they were lazy or inept; rather, it only proves, once again, the major theme of the Series: we live in an oligarchy, not in a polity or a democracy. In an oligarchic political system, it goes with the territory that people do not have the power to enact needed changes. In America’s case; I will go further: not even the oligarchy has the power to do what needs to be done.

The long-term decline of the middle class and the further impoverishment of the lower class will continue, deepen, worsen. The issue is not whether or not people can change things now (they cannot) or if sometime later the unfavourable circumstances existing today will change (they will), but rather if Americans will be ready to seize the opportunity – always fleeting and rare – when and if the new situation creates it. We saw such an opportunity -- the necessary correlation of people and events for a constructive revolution -- in America in the late 1700s.

Jerry A, Peter M, Roger N. You note that on December 31, 2011, Obama signed the National Defense Authorization Act. Title X, Subtitle D, “Counter Terrorism,” allows for the indefinite detention without a trial of people working for Al Qaeda or associated forces. (An amendment proposing the exclusion of American citizens was rejected). You don’t have to be a lawyer to know that indefinite detention without a trial of Americans is unconstitutional (see Part 8 on due process and equal protection.) Of course, the word associated can and will be stretched to include everyone everywhere, which is why the word was put there.

President Obama claimed, "I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens. [...] My Administration will interpret section 1021 in a manner that ensures that any detention it authorizes complies with the Constitution, the laws of war, and all other applicable law. [...].” However, the Obama-sanctioned death without a trial of Anwar al-Awlaki, an American citizen ( Part 8) killed on September 30, 2011, already demonstrated in bombs and blood that Obama’s claim is false. The ACLU, among others, immediately saw through it: "The statute contains a sweeping worldwide indefinite detention provision...[without] temporal or geographic limitations, and can be used by this and future presidents to militarily detain people captured far from any battlefield." You disagree with the ACLU statement? Think again. A TV show put the issue nicely, bluntly: Wha’cha gonna’ do when they come for you?

Thus, Obama’s signature of the NDAA further saps the constitutional pole of America. Nothing surprising there. That pole was erected in 1789; it was the center of the polity (Part 9). It is only fitting that, with the end of the polity in 2008-2009, the pole now be taken down. The only question was who would do the dismantling. Just as it took Richard Nixon, a conservative Republican, to recognize China -- if a liberal Democrat had done it, a blizzard of treason allegations would have whited-out the airways and the halls of Congress -- so it took a Democrat Harvard lawyer to begin the unabashed, unabridged subversion of the Constitution. Anybody else would have been impeached.

A necessary side note: Obama’s signature is one amid a myriad of indications that the United States government does not understand who terrorists are and where they come from, why they think and act the way they do. Otherwise it would not hand a handful of terrorists what a world war and countless conspiracies failed to achieve: the destruction of the United States Constitution.

Fred. M., Bob B., Ernie M., Bill F., Ernesto S. You want more on an issue raised in Part 12: the creation of a (i) new economic service, (ii) new economic sector (after natural resources extraction, production and services), or (iii) fourth source (after land, labor and capital) of exchangeable wealth. You are asking the most important economic question anybody can ask -- and nobody except you is asking it.